- New laws reduce fees to boost foreign build-to-rent investment for rental supply
- Build-to-rent can potentially create 150,000 new rental homes in the next decade
- Redirecting overseas funds into local rentals seen as key to hitting 1.2 million housing target
The Property Council of Australia (PCA) has welcomed the introduction of new laws lowering fees on foreign investment into build-to-rent housing developments.
PCA Head of Policy and Advocacy Matthew Kandelaars said reducing the charges to appropriate commercial levels will help boost the construction of much-needed new rental stock.
Build-to-rent allows tenants long leases alongside amenities and professional management. Kandelaars stated the sector has the potential to deliver 150,000 new Australian rental homes within a decade – but policy settings need to be supportive.
Funds flowing abroad
“International capital, including Australian superannuation funds, is backing build-to-rent housing projects abroad as we speak. We need to redirect this capital to support the construction of new Australian homes,” Kandelaars said.
“The nation won’t reach its 1.2 million homes target by 2029 without global investment.”
– Matthew Kandelaars, Property Council of Australia
He explained foreign investors in build-to-rent currently face far higher fees than commercial land deals. Under revised rules, investors now enjoy parity between asset classes.
The PCA did, however, caution that imposing affordable housing mandates at a 15% managed fund tax rate risks the wider 150,000 unit target. Specialist modelling shows a 10% rate is optimal to drive about 10,000 affordable rentals within the broader pipeline.
Nonetheless, progress on incentivising foreign capital via reduced bureaucracy is seen as positive for alleviating Australia’s expansive housing shortfall over time.
